Insurers Aim To Overhaul Health Law

Washington — Insurers want to change President Obama’s health care law to provide financial assistance for people buying bare-bones coverage. That would entice the healthy and the young, the industry says, holding down premiums.

So-called catastrophic plans are currently not eligible for the law’s subsidies, and only 2 percent of the 8 million consumers who signed up this year picked one. Subsidies bring down the cost of monthly premiums.

The proposed change is part of a package of recommendations that America’s Health Insurance Plans, the main industry trade group released last week. Others address how to smooth transitions for consumers who switch insurance companies, as well as making it easier for patients to find out which hospitals and doctors are in particular plans and whether their medications are covered.

“What is crucial for public policy leaders is to balance access and affordability,” said Karen Ignagni, head of the trade group. “Unless people feel that coverage is affordable, they won’t participate in the system.”

Adults ages 18-34, the health care law’s most coveted demographic, are under-represented among those enrolled for subsidized private insurance this year. Insurers are currently filing their proposed premiums for 2015, and increases of 10 percent or more are anticipated. Nonetheless, the new state insurance exchanges are poised to grow, with more carriers entering the market to compete for business.

Given the polarized politics of health care in Washington it’s unclear how the industry’s latest proposal might advance. It might get a chance if Republicans in Congress abandon their crusade to repeal Obama’s law and start focusing on making changes to individual components.

The proposal could also encounter opposition from consumer groups, which take a dim view of catastrophic plans. Some consumer organizations have instead called for reducing out-of-pocket costs borne by consumers who buy a midlevel silver plan, the pick of 65 percent of those signed up this year.

Catastrophic plans offer low monthly premiums but require consumers to foot a hefty share of their annual medical costs. They are designed to protect healthier people from financial ruin due to an accident or an unexpected diagnosis of serious illness, although they also cover basic preventive care at no cost to the consumer.

Such plans currently available through the new insurance exchanges are open only to people under 30, as well those who have received a hardship exemption from the health law’s individual requirement to carry a policy.

The industry proposal would create a new catastrophic plan open to people of any age and eligible for tax credits provided by the law. It would have an annual limit on out-of-pocket costs and preventive care would be covered at no charge to the patient.

Other elements of the insurers’ plan can be voluntarily adopted by the companies or codified by government regulation.

They include a 30-day transition period for certain patients who switch insurance companies or whose doctors no longer participate in the plan. During the transition, patients would be able to remain under the care of their current physician while paying lower in-network rates. Similar transition policies would apply to medically necessary prescriptions.

The health insurance industry has a complicated relationship with the health care law.

Insurers spent tens of millions of dollars to defeat the legislation as it was being debated in Congress and still seek to roll back taxes and Medicare cuts that affect the plans.

But the industry has also become one of the administration’s main allies in carrying out the law, enduring the cascade of rollout problems last fall and working behind the scenes to make sure consumers whose old plans got canceled were able to maintain coverage.